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Driving Customer Loyalty in a Down Economy

Gregory North, Senior Vice President, Quality Programs

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At times the news seems all bad

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But we know that in every crisis, there is opportunity

“When written in Chinese, the word "crisis" is composed of two characters. One represents danger and the other represents opportunity.”

»President John F. Kennedy

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Decisions, decisions

Behind one door lies opportunity, the other danger…but which one?

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Survival Strategies in a Down Market

Sit tight, this too shall pass

Cut costs, maintain margin

Slash prices, offer discounts

Place a big bet – invest and innovate

Focus on customer loyalty – retain and grow

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Risk vs. Reward

High return, low risk?Focus on customer loyalty – retain and grow

High return, high risk?Place a big bet – invest and innovate

Racing to the bottom?Slash prices, offer discounts

Spiraling to hell?Cut costs, maintain margin

Feeling lucky?Sit tight, this too shall pass

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Perhaps your customers have the answer

Focus on customer loyalty – retain and grow

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Best Buy sure thinks so

Best Buy to Employees: Survive the Economic Meltdown by making customer service a priority

»"In 42 years of retailing, we've never seen such difficult times for the consumer," Brian Dunn, president and chief operating officer of Best Buy, said in a statement. "People are making dramatic changes in how much they spend, and we're not immune from those forces." A Best Buy employee forwarded us an email that went out to all associates this morning — stressing that a renewed commitment to customer service was the way forward during these troubled times.

By Meg Marco

The Consumerist, Wed Nov 12 2008

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They are not alone

86% of small business owners surveyed will place extra emphasis on offering quality customer service during tough economic times, up from 77% last fall.

Source: AMEX Small Business Monitor Survey - 2008 2nd Half

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Focus on the Customer: More Than a Defensive Play

Before your market turns, your customers might see an uptick in theirs

Watching for patterns in their decision-making provides you with an early warning system

Carefully monitoring customer signals is key to finding opportunities BEFORE the upturn is general knowledge

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Implications for you

If you are not focusing on the customer during these tough times, know this

- your competitors are.

If you are

- is it working?

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Not everybody is listening

66% do not have 'voice of customer programs in place

59 % do not compensate employees or executives based on customer loyalty, satisfaction improvements or analytics.

75% receive customer feedback via e-mail, but only 23% track & measure the volume and nature of these messages.

Only 30 % rated high their ability to handle and resolve customer problems or complaints.

Only 13% have deployed real-time systems to collect, analyze and distribute customer feedback.

56% had no programs in place to track word of mouth among customers.

Source: Newsfactor Business Report

Rx for the Downturn: Better Marketing, Customer ServiceBy Brendan B. Read April 6, 2009

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5 Steps to Capitalizing on the Downturn

Get Listening» Increase frequency and number of listening

posts for gathering VOC

Get Personal»Don’t be afraid to ask your customers about

their challenges

Be Aware»Look for changing needs and expectations

Stay Focused»Map your value add to the changing need

Go the Extra Mile»Seize opportunities to help customers in crisis

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Get Listening

Voice of the customer (VOC) is more than satisfaction or loyalty data, it is the source for customer requirements

In rapidly changing environments you need to adjust the how and how often you check in on:

»Satisfaction

»Loyalty

»Complaints

»Positive references

Increase frequency and Increase frequency and number of listeningnumber of listening

posts for gathering VOCposts for gathering VOC

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Get Personal

Your customers are hurting

»Their sales are down

»Their business may be threatened

»Their job status may be uncertain

Do you have something they really need right now?

You won’t know if you don’t ask them. Don’t be afraid toDon’t be afraid to

ask your customersask your customersabout their challengesabout their challenges

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Be Aware

The situation is very fluid – our environment is shifting daily

Your customers may need to change - fast

So might you – so watch the field not your feet

Look for changing needsLook for changing needsand expectationsand expectations

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Stay Focused

This is not the time to forget what made you successful

Avoid the pitfalls of becoming internally focused

Careful about cutting corners

Find new opportunities for what you do best

Map your value add toMap your value add tothe changing needthe changing need

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Go the Extra Mile

Crises are the moments when we make customers for life

Customers in distress will never forget the company that helped them make it to the other side

Create new value by doing more than your customers expect

Seize opportunities toSeize opportunities toprovide unexpectedprovide unexpected

value to customers in crisisvalue to customers in crisis

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Summary

Current crisis provides our businesses with opportunity

Focus on your customers - low risk– high reward

This fast changing environment requires frequent pulsing

Don’t forget what you do best, but look for opportunities to provide unexpected value

Crises are when we make customers for life